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Obama on Social Security and Medicare
"What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further," he said. "We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else's."
And on unions:
The president-elect also gave his support for legislation that would make it easier for workers to unionize, but he said there may be other ways to achieve the same goal without angering businesses. And while many Democrats on Capitol Hill are eager to see a quick vote on that bill, he indicated no desire to rush into the contentious issue.
"If we're losing half a million jobs a month, then there are no jobs to unionize, so my focus first is on those key economic priority items I just mentioned," he said. "Let's see what the legislative docket looks like."
Is that a "no"?
The real question for progressives to ask is why this is happening (in the interests of fairness, I should add that libertarians need to ask themselves similar questions about the Bush years). It is too soon for them to vilify Obama, so you'll either hear mutterings about him not being bold enough or just not hear much at all. The deeper reality is that Obama understands that this country was set up to be governed from the center and he'd rather start there than move there after two years of failed attempts to do something else. Don't be taken in by those funny maps they show about how the Democratic legislators are further left than before; the more power you have, the harder it is not to govern from the center.
The bottom line: If I'm happy so far, a lot of you out there have to be unhappy.
Posted by Tyler Cowen on January 16, 2009 at 07:28 AM in Current Affairs | Permalink
Comments
The key argument Obama made is this: "We can't solve Medicare in isolation from the broader problems of the health-care system."
In other words, he's going to "solve" Medicare by giving us national health care. Tyler, do you now think that's a great idea? Is it a solution to the problem of Medicare to create the same obligations for everyone else? (Oh, I know there will be cost containment--we'll go after the drug companies and other innovators first. But that won't be enough to make these promises sustainable.)
Posted by: Thomas at Jan 16, 2009 8:50:20 AM
I'm getting exactly what I want. An intelligent, articulate centrist. A problem solver. I realize he's going to make some things better and some things worse, but he's reasonable. And "reasonable" seems like a big step up from where we've been.
Posted by: mrshl at Jan 16, 2009 9:08:16 AM
Oh dear, as a libertarian, I have been asking myself about Bush for a long time. I've long said he was a Democrat. But I now think the names Republican and Democrat are totally meaningless - as you note, they are both plain old centrists.
So to answer the questions, "Why is this happening?" Government has little to do with governing, and everything to do with winning votes. So today's politician's platforms rest on finding proposals that are equally abhorrent to both sides of the fence so at least people can shrug and say, "Well, I'm not happy, but hahaha, I bet he's not happy either." So it seems the goal is to achieve defacto satisfaction out of knowing everyone else is just as miserable as we are.
Posted by: Milena Thomas at Jan 16, 2009 9:10:03 AM
Writing about 'cost containment' and what is essentially a monopolistic system of national health care does not make sense to me because when patients do not pay for their bills directly they do not act like typical consumers who typically care about cost. This is part of the trouble today because when insurance companies pay the bills patients do not account for the cost of the care that they are receiving.
This means two things. First, prices go to much higher levels than they otherwise would have. Second, the low out of pocket expenses increases the demand for scarce services of a limited number of physicians who, thank to the AMA, are the bottleneck in the delivery process. This means that highly regulated systems in which patients are disconnected from the price mechanism have both rising service costs and inefficient allocation of resources that leads to increased waiting times.
It would seem to me that we need to look at procedures that the alternatives should be evaluated by looking at medical services that are not covered by either insurance or government programs and compare the cost trends for those services to the overall health care costs trends. I imagine that if we looked at corrective eye surgeries, face lifts or various cosmetic procedures we would find costs slower than the national health care rates or actually falling when adjusted for inflation.
Posted by: Vangel at Jan 16, 2009 9:44:26 AM
"Don't be taken in by those funny maps they show about how the Democrat legislators are further left than before;"
Of course it likely only matters where the median of the majority is not the outliers.
The median NOMINATE scores [-1 to 1] for house democrats from the 89 to the 109th are:
-0.2420, -0.2420, -0.2830, -0.2830, -0.2820, -0.2820, -0.2900, -0.2900, -0.2790, -0.2790, -0.3000, -0.3000, -0.3030, -0.3030, -0.3125, -0.3125, -0.3205, -0.3205, -0.3205, -0.3205, -0.3290, -0.3290, -0.3255, -0.3255, -0.3190, -0.3190, -0.3190, -0.3190, -0.3200, -0.3200, -0.3190, -0.3190, -0.3200, -0.3200, -0.3215, -0.3215, -0.3230, -0.3230, -0.3230, -0.3230, -0.3360, -0.3360, -0.3885, -0.3885, -0.3885, -0.3885
It certainly looks like they have shifted left.
"the more power you have, the harder it is not to govern from the center."
Interesting conjecture. Got a causal mechanism in mind for that?
Posted by: goodnessOfFit at Jan 16, 2009 9:45:50 AM
> I'm getting exactly what I want. An intelligent, articulate centrist. A problem solver. I realize he's going to make some things better and some things worse, but he's reasonable. And "reasonable" seems like a big step up from where we've been.
I'll sign this too.
Posted by: babar at Jan 16, 2009 10:04:20 AM
Obama rightly perceives that replacing secret ballot voting with card check will have exactly the sort of negative consequences that prevent us from using a card check analogue in the political process. I wish, though, that he would tell the people pushing it to drop the subject.
Posted by: Matt at Jan 16, 2009 10:26:29 AM
My husband who has congestive heart failure due to heart problems starting in his early 30's is now 70 yers old. He was talking with his doctor this week and both speculated on the impact on him if we get national heath care. It wasn't hard to imagine how he would no longer qualify for the top notch care he has experienced all these years keeping him alive today. Remember, national health care in all countries now having it means rationing. The same would go for his former boss who had a heart transplant at 65. He too would be dead under national health care. New hearts go to those younger.
Posted by: loco36 at Jan 16, 2009 10:59:01 AM
I am distrurbed that Tyler seems to think that he has the ability to accuratly interpret Obama speak. I in contrats think that Obama has spent most of his political career avoiding taking strong stands. You listen to an Obama speech and you say that sounds nice, how is he going to do that?
In his comments Obama is a Social Democrat i.e. he believes that capitalism is deeply flawed and leads to social injustice. For Obama, the heavy hand of government, through regulation and taxation, must fairly reallocate resources. Of course what one person thinks is fair is highly subjective. Property rights and effiency are secondary concerns to the pursuit of equitable outcomes.
Tyler may think that he has a special ability to read the Obama tea leaves, I would urge greater caution. We may just all be redfining what the center is in this country.
Posted by: DanC at Jan 16, 2009 11:06:31 AM
"The real question for progressives to ask is why this is happening (in the interests of fairness, I should add that libertarians need to ask themselves similar questions about the Bush years)."
Eh? What does Bush have to do with libertarianism?
"The deeper reality is that Obama understands that this country was set up to be governed from the center and he'd rather start there than move there after two years of failed attempts to do something else."
Correct. And as a libertarian who is sure to dislike many of Obama's policies, whether left or centrist, I applaud him for doing this and have been trying to convince liberals (unsuccessfully!) of the the wisdom of this course.
"Don't be taken in by those funny maps they show about how the Democratic legislators are further left than before;"
Sorry, those maps are right. Gerrymandering of districts has become a fine art. While voters have not become any more right/left wing, gerrymandering has made it easier for strongly left and strongly right candidates to win and to retain their seats. The House has become less centrist, on both sides of the aisle.
"the more power you have, the harder it is not to govern from the center."
Now there'sa claim that needs some evidentiary support! To take extreme examples as a starting point, did Mao, Stalin, Pol Pot, Pinochet, etc., govern from the center? Given the extremity of their power, this claim would suggest that they had to do so. I suspect Cowen meant something other than what his words seem to say (either that or he hadn't had his coffee yet).
Posted by: James Hanley at Jan 16, 2009 11:17:45 AM
I'm getting exactly what I want. An intelligent, articulate centrist.
Unfortunately, Congress isn't populated with any of these. Game over, thanks for playing.
Posted by: at Jan 16, 2009 11:19:23 AM
Bush is a politician who was perfectly happy to piss off 49% of the country just with his way of speaking.
Obama is a politician who doesn't see any reason why his rhetoric should alienate any voters at all, or no more than a small percentage.
I do think these rhetorical strategies do indicate something about their respective approaches to government, but it's interesting to see people get excited about what are just words. Or in other terms, I think Obama is a very smart politician.
Posted by: Barbar at Jan 16, 2009 11:40:51 AM
sounds like a recipe for a robust form of government
Posted by: simpsonian at Jan 16, 2009 11:46:30 AM
Tyler & Obama appear to live together in a lovely dream world that I would like to visit. But politics in a democracy is coalition building.
And you build coalitions by promising candy to your required in-groups while reassuring them that those other nasty monkeys will be relocated to another portion of the tree canopy where they can hardly interrupt us enjoying our delicious sweeties.
In Obama's case his coalition is made of gay folks, old people, union members, and the anti-war. Having already dispensed with gay people, he is now in the linked article apparently disappointing the remaining parts of the Democratic electorate.
(The anti-war will be quite upset if he doesn't issue the Gitmo order the first day and they will certainly have a conniption if he takes his whole first term to actually shutter it.)
Congress is re-elected by these groups and they will soon rebel if Obama interrupts the candy delivery. I am losing hope he will ever get a damn thing done.
As fcr his plan to set up a group of warring factions between the White House advisors and the Cabinet - Obama's lack of DC experience is showing here. With an executive branch spending its time in-fighting, and Congress demanding the ability to turn over the Turkish delight, it's just gonna be ugly, peeps, ugly.
Some grown up needs to sit Obama down and explain to him how democracy actually works outside of a civics textbook.
Posted by: StreetWalker at Jan 16, 2009 12:06:58 PM
I am one of those who does not think we need to do anything
about social security, the position of Obama during the campaign,
at least for his presidency. The system has beaten the "low cost"
projection in as many years as it has not recently, the projection
under which the system never runs a deficit, although most people
have no idea of this at all (or that if the system goes "bankrupt"
in 2041, it will mean that recipients will "only" get about 120% in
real terms of what current ones do, eeeeek). So, I am not pleased
about this caving in to conventional stupidity and ignorance, oooops,
I mean "wisdom." It would appear that this is a combination of the
influence of Larry Summers getting to be "economics czar," who has
long drank the "social security reform" kool-aid, and perhaps Obama
thinking he needs to throw this bone to the "blue dog" Dems in the
Senate who are worried about longer term deficits, particularly Kent
Conrad, Chair of the Senate Finance Committee, who has also long
imbibed of the same kool-aid.
Posted by: Barkley Rosser at Jan 16, 2009 1:07:46 PM
Later in that article: "Social Security, we can solve," [Obama] said, waving his left hand. "The big problem is Medicare, which is unsustainable. . . . We can't solve Medicare in isolation from the broader problems of the health-care system."
So he still agrees with liberals' analysis of the problems with the entitlements. The implication, I think, is that the focus of his "entitlement reform" will be reforming the health care system (since that's where the big problem must be addressed), but he also wants to make some changes to Social Security and maybe Medicare. Which is... what he campaigned on. Candidate Obama had a big health care reform proposal and advocated some tinkering with Social Security (raising the cap on the payroll tax), which would fit the bill. It remains to be seen what his final plans will be, and if liberals will like them more or less than his campaign proposals, but I am not unhappy yet.
Posted by: Dan at Jan 16, 2009 1:56:04 PM
I am still waiting for someone to explain what measures for reigning in Medicare costs require a complete overhaul of healthcare financing first? What, exactly, could Medicare do with single-payer for all that it cannot do today? Why not tackle Medicare/Medicaid first and show a palatable way to reduce healthcare costs, then sell this plan to the general public?
Posted by: Yancey Ward at Jan 16, 2009 2:52:27 PM
Obama comes into office with Bush having quasi-nationalized the financial industry, and with Obama possessing carte blanche to vastly increase government spending. This is a more propitious situation for a man of the left than he could have dreamt of. Why screw it up by picking symbolic fights when he's got trillions of dollars under his control?
Posted by: Steve Sailer at Jan 16, 2009 3:31:09 PM
"For Obama, the heavy hand of government, through regulation and taxation, must fairly reallocate resources."
It's a good thing Bush didn't reallocate resources. (Guffaw.)
Posted by: meter at Jan 16, 2009 3:43:44 PM
I don't see Social Security as particularly needing fixing either, but the general fund will need much work in the years ahead. Long range, it will need spending cuts and/or tax increases. Establishing these changes for the future will largely remove Social Security from the debate. Not a bad thing to do for the time beyond our immediate crisis.
Posted by: Lord at Jan 16, 2009 5:04:11 PM
to meter
Bush was not a great President. However, Obama wants to allocate resources based on his idea of social justice. Perhaps even more worrying is that he wants to allocate trillions from future generations to pay for the bad business decisions of the recent past.
Using the power of the government to reallocate private property, to increase taxes without regard to effieciency, to increase the death tax, and to impose massive taxes on future generations hardly seems like steps to make the country better. Which of these steps do you think will improve the future for the country?
Posted by: DanC at Jan 16, 2009 5:24:21 PM
"the death tax"- what is so wrong with estate taxes? To me, given that I believe we need some money for public goods provided by government, I think inheritence taxes are better than most others. I mean, the first issue with taxes is messing up incentives, but how much about your life are you going to change based on what happens after you die? And how wisely do most heirs manage their inheritence? I say this as someone with wealthy grandparents, who would personally benefit from no estate tax (and as one who is irritated by the current budget's massive military spending), but who also wants to live in a meritocracy where everyone is born with a chance to achieve, not some born in slums while others are born never having to work.
Posted by: Ami at Jan 16, 2009 8:25:52 PM
Some grown up needs to sit Obama down and explain to him how democracy actually works outside of a civics textbook.
Yes, maybe an anonymous blog commenter named "StreetWalker" could spend a few minutes with the President-Elect of the United States to teach an ex-Senator and ex-State Senator how the government works in the real world.
However, Obama wants to allocate resources based on his idea of social justice.
I really don't understand this kind of thinking. The tax structure under Obama will be more or less the same as it was under Bush. I'm not saying you have to like it but where do you get this idea that Obama is going to radically change the philosophy behind taxation and government spending?? "A marginal rate of 35% for the top tax bracket is a natural property of the world, completely disconnected from anyone's ideas about social justice. If Obama (and Congress) changes that to 37%, then he's imposing his own personal idiosyncratic view of social justice on us and life will never be the same." Uh no, he would just be raising some tax rates, just like Bush lowered some tax rates.
Bush raised taxes on future generations when he raised government spending, you know. Again, it's one thing to think spending should be higher or lower, but why the fascination with the completely unrealistic case of zero taxes and spending as an ideal free of conceptions of "social justice"? What does that add?
Posted by: Barbar at Jan 16, 2009 11:28:31 PM
I wonder if readers of this blog are uninformed because they don't want to speak from facts, or whether they purposely create a strawman when describing the positions of those they oppose.
Obama has never called for single payer or national healthcare. Instead he has only called for everyone to be able obtain the insurance policy of their choice at a reasonable price they can afford.
Now the health care situation has been on the table for much longer than 16 years, and yet I have never said conservative solutions that make any sense.
Of course, they do mumble something about "free market health care" would solve the problem.
Well, a free market in health care is what Obama is calling for. You and I go into buy health insurance, and we are both quoted a price, and price is the same.
Instead current system operates like you and I going into a car dealer and I get quoted one price and you get quoted another price, a price higher because of your genetics, like you are black.
The purpose of insurance is to generally equalize costs by sharing the risks. But the way that insurance works in the US, and this is largerly driven by conservatives, is that the insurers bid for the healthy clients, the ones with no history of serious illness or risk factors. All the rest of the people are effectively directed by the insurance companies to welfare care, healthy funded by taxes.
With a self proclaimed conservative Whitehouse and Congress, nothing was done to reduce the per capital taxes going pay for health care in the US below the same for Canada.
Let me put that a different way: probablisically you are paying more taxes to fund health care in the US than you would if you lived in Canada. And instead of paying less privately as you would in Canada, you are paying more than you are paying in taxes.
Worse still, the performance of Canada's health care is statically better than in the US: you are likely live longers in Canada, less likely to have child die in child birth or infancy, and more.
Mitt Romney as governor of Mass set out to address health care because business was demanding it, and today Wal-Mart's chairmen is stronging backing OBama on this, and he ended up essentially doing what Switzerland did - expanded employee health care to 100% of the population with unemployment and welfare specifically continuing any existing insurance you have picked from the typical menu of choices offered by employers. For those without an employter, the Mass set up the Connector which gives individuals the same group choices and rates as employers get.
The Mitt Romney and Obama and lots of other's objective is to get the government out of paying for medical treatment, and limit the role of government to setting insurance regulations and then paying or subsidizing insurance premiums so everyone has insurance.
Tbe result is a free market in health insurance. You see a policy you like at a price you like, you buy it without the selling deciding of they want to sell you the product or not.
Insurers are going back to Obama's team on this issue and saying, "we'll insure everyone who walks in the door, as long as everyone must walk in someone's door and buy insurance." Insurers clearly want to eliminate the moral hazard of people holding off on buying insurance until they are sick. If everone is required to buy insurance, then the insurers won't demand that government be in the health insurance business to pay the medical bills of those the insurers don't want to insure.
Posted by: mulp at Jan 17, 2009 12:29:19 AM
Don't be taken in by those funny maps they show about how the Democratic legislators are further left than before; the more power you have, the harder it is not to govern from the center.
I love how meaningless tropes are thrown around. Would anyone care to define what "the center" is?
Posted by: Calvin Jones and the 13th Apostle at Jan 17, 2009 12:51:53 AM
